No Procedural or Substantive Infirmities in Plaintiff’s Rejected 998 Offer.
In Ganson v. Ayoub, Case No. B223504 (2d Dist., Div. 5 May 13, 2011) (unpublished), plaintiff motorcyclist sued car driver and car owner for injuries occurring as a result of being struck by the car. Plaintiff offered to settle through a 998 offer of $499,999.99 through identical offers to each defendant, which was sent to defendants’ lead counsel but not their newly-associated counsel. The 998 offers expired without acceptance, and the jury awarded plaintiff total damages of $549,198. After dueling costs memoranda were filed, the trial court awarded plaintiff $70,215 in costs. Defendants appealed.
They lost.
First, the offer was properly served on lead counsel and was not flawed because it was not served on associate counsel. It is up to the defense counsel to divide up responsibilities, but notice to one set of attorneys is notice to the represented parties.
Second, the offers were not unclear in nature. Although the offers were the same, clarifying language in the offers made clear that any moneys paid by either of the defendants offset any judgment, so that only $499,999.99 was being sought from both defendants considered as a whole. Plaintiff’s offers did not have this offset language in the Notice of Acceptance, but the appellate court found that there is no requirement that the defendants had to accept the compromise by signing that Notice of Acceptance. They could have prepared their own Notices of Acceptance which mirrored the language of the offers complete with offset language. No apportionment was necessary because both defendants were represented by the same carrier-provided defense counsel having control of the entire defense of the case.
Third, the 998 offer was found to be reasonable. The defense mainly argued that it did not have any information to indicate future medical expenses would be necessary when the offers were made. The appellate court rejected this contention, finding “no cases which declare a 998 offer to lack good faith or be unreasonable because the defendants were not kept abreast of the progress of the plaintiff’s healing.” Rather, it was incumbent on the defense to determine why the offer was higher than their damage risk assessment in order to properly evaluate it. (Slip Opn., p. 10.)